Ad-spending soothsayers optimistic on year ahead

Media companies are counting heavily on the Summer Olympics and the presidential campaign to end the ad-spending recession, according to speakers at the annual Media Week conferences sponsored by UBS and Credit Suisse First Boston.

The industry's leading forecasters put forth their most upbeat readings yet for 2004, but newspaper publishers (see story, below) and local radio and TV station groups warned that "low visibility" remains a problem.

Glenn Britt, chairman-CEO of Time Warner Cable, noted local ad sales are still volatile, up one month, down the next. "If that's an economic indicator, we're not out of the woods yet," he said.

`pretty good'

But the economic recovery is under- way, according to the industry's leading forecasters. "It looks like a very sustainable economic expansion is finally in place ... so the overall expectations, the general trends we see in media, are pretty good for 2004," said Robert Coen, director-forecasting for Interpublic Group of Cos.' Universal McCann. Mr. Coen forecast U.S. spending will grow 6.9% in 2004 over 2003, to $266.4 billion.

John Perriss, chief executive of Publicis Groupe's ZenithOptimedia, said his forecast shows world spending will grow 4.7%, or 3.6% after adjusting for inflation. North America will show 3.9% growth after inflation, and Europe will show positive post-inflation numbers, up 2.2%. The Asia/Pacific region will grow 4.6%.

The Olympic Games and the election are expected to be a strong tonic for local TV stations. Rich Boehne, exec VP, E.W. Scripps, said representatives of his company's TV station group have already met with the top political ad agencies in a kind of "political upfront."

Spanish-language media are also counting on the political surge. Andrew Hobson, exec VP, Univision Communications, noted the concentration of Hispanic voters in battleground states such as Texas could work in his network's favor.

But some speakers warned the total of political ad spending is still in question, pending the enactment of the McCain-Feingold campaign-finance bill. "The question for '04 is: How big will the political pool be?" said Patrick Mullen, president, Tribune Co.'s broadcasting unit.

The elections and the Olympics could add about $1 billion each to the world's total ad spending growth in 2004 and the European soccer championships will add another $500 million, said Mr. Perriss. But he warned that with nearly 17% of next year's growth tied into one-time events, the absence of those factors could create a "void" in 2005 and drag down totals for that year.